[IMGCAP(1)]I’m thrilled to report that while in Singapore last month, I had the great honor of interviewing investor and author Jim Rogers in person. He was extremely kind in hosting me and entertaining my questions, and I’m excited to be able to share our fun 45-minute chat with you here.
Still a bull on China, and the renminbi, too
Jim Rogers was a bull on China decades before it became fashionable, and he’s still wildly optimistic about China’s future.
“I believe China’s going to become the next great nation in the world,” he says.
Rogers has driven across China three times, and has seen much of the country’s evolution from the ground. He’s been enthusiastic about China for some time now – at least since his Adventure Capitalist trip (circa 2000). Anyone who’s invested alongside his longtime bullish views on China has seen very handsome returns.
He says that, according to local legend, Singapore was a role model for China’s development. Singapore has evolved very rapidly over the past four decades, from a Southeast Asia backwater in the 1960s into one of the most prosperous countries in the world today.
“The rumor is that Deng Xioping visited here [Singapore] in 1978. When he saw what was going on, he returned to China, and started to open the country up,” Rogers told me. “In fact, if you ask some people here, they’ll say the Chinese are still keeping a close eye on what’s going on here.”
An interesting side play he likes for the years and decades ahead is Chinese tourism.
[IMGCAP(2)]“The Chinese have not been able to travel for the last 300 years. Now they can—and they are going to flood the world with tourism for years to come,” he says.
Chinese tourists should have a lot of purchasing power from a strong currency, if Rogers is right. He cites the Chinese renminbi as one of his favorite picks right now, and believes it’s about as close to a sure thing as you can get.
“Here in Singapore, they’ve allowed their currency rise to mitigate inflation. I expect the Chinese will eventually have to do the same thing.
“You’re better off cutting growth in advance, than allowing inflation to get out of control. If growth drops to 3 percent, who cares? That’s better than letting inflation get out of control, because once it does, it’s very tough to reign in.
“Then you have to incur a recession or worse to control inflation.”
Commodities should remain hot
“Most of my portfolio is in commodities and currencies,” he shared. “I expect to make money in commodities because, if demand continues to rise, that is bullish for commodities.”
But what if we see a repeat of the financial collapse of 2008?
“If demand collapses, I anticipate the central banks of the world will print more money, and that will then cause commodities to rise,” he counters.
Agriculture is still his favorite, thanks to supply constraints that are nowhere close to being solved—including a lack of farmers.
“The average farmer in the United States is 57 years old,” Rogers shared (providing me with yet another “How the heck did he know that offhand?” moment).
“Who’s going to farm the land 10 years from now? These guys will be 67…if they’re still around. And nobody is graduating with farming degrees today.”
“There are just not enough farmers in the world. There are vast stretches of empty land in Japan, believe it or not—with nobody to farm them.”
He thinks this commodity bull market could continue to rock and roll for some time because “little or no supply has come on line yet.” He points out that the commodity sector was starting to attract attention pre-2008, as its bull run began around 1999, but the 2008 financial crisis knocked a lot of potential new supply offline. Which of course sets the stage for further price increases.
Jim Rogers’ latest book is A Gift to My Children: A Father’s Lessons for Life and Investing.
Brett Owens is chief executive and co-founder of Chrometa, a Sacramento, Calif.-based provider of time-tracking software that records activity in real time. Previously marketed to the legal community, Chrometa is branching out to accounting prospects. Gains include the ability to discover previously undocumented billable time, saving time on billing reconciliation and improving personal productivity. Brett can be reached at 916-254-0260 and firstname.lastname@example.org.